SafeMoon CTO Pleads Guilty in $200M Crypto Fraud Case

The chief technology officer of SafeMoon, Thomas Smith, has pleaded guilty to charges involving a multimillion-dollar crypto fraud scheme. According to a recent filing, the executive appeared before Magistrate Judge Cheryl Pollak in a Brooklyn federal court to change his plea from not guilty to guilty on charges of securities fraud conspiracy and wire fraud conspiracy.

Judge Pollak recommended that US District Judge Eric Komitee accept Smith’s new guilty plea, adding that wire fraud conspiracy carries a maximum 20-year sentence and securities fraud conspiracy up to 25 years.

SEC Battles With SafeMoon Execs

Before the new development, in November 2023, the Justice Department and the United States Securities and Exchange Commission (SEC) charged Smith and SafeMoon CEO Braden John Karony and creator Kyle Nagy with securities fraud, wire fraud conspiracy, and money laundering conspiracy.

During the time, the agencies accused the trio of selling SafeMoon token (SFM) and misleading buyers by claiming its liquidity was locked and inaccessible, while they allegedly could access it and later took the funds for themselves.

The SEC and prosecutors accused the three executives of stealing over $200 million from SafeMoon (SFM) and using investor funds for personal purchases like luxury cars and real estate. They also stated that SFM’s market cap was between $5.7 billion and $8 billion before it dropped nearly 50% on April 20, 2021, after it revealed that the token’s liquidity pool wasn’t locked as claimed.

Over $60M Crypto Fraud 

In related news, the SEC also charged two brothers in a $61.5 million crypto fraud case. The siblings, who ran Triton Financial Group and GCZ Global, falsely claimed these companies were legitimate and promised considerable returns to investors. Instead, they used them for a fake crypto lending scheme and stole millions of dollars from investors.

The agency noted that the brothers falsely claimed Jonathan Adam created a bot for a crypto trading platform that could identify arbitrage opportunities. They told investors their money would go into a lending pool for flash loans to take advantage of these trades. However, the SEC discovered the bot was fake, and the brothers misled investors.

HashFlare Execs Pleads Guilty in $577M Fraud Case

In another similar case, Sergei Potapenko and Ivan Turõgin, the co-founders of the crypto mining ponzi scheme HashFlare, pleaded guilty to defrauding hundreds of thousands of victims within and outside the US of over $577 million through their purported mining service.

The executives pleaded guilty to one count of wire fraud conspiracy and could face up to 20 years in prison. A federal judge will decide their sentencing on May 8.